Israel Radio reported that Israel's friends in the US Congress are
applying heavy pressure on the US administration and the EU not to
modify their stances regarding the Palestinian national unity
government. The radio reported that US Senators Bill Nelson (D-FL)
and John Ensign (R-NV) asked Secretary of State Condoleezza Rice not
to resume financial assistance to the Palestinians as long as they
do not abide by the terms of the Quartet. Israel Radio reported
that on Tuesday State Department Spokesman Sean McCormack justified
meetings of USG officials with Palestinian officials, including the
one that took place on Tuesday between US Consul-General in
Jerusalem Jacob Walles and PA Finance Minister Salam Fayyad, which
was reported in most media. McCormack was quoted as saying: "We
have settled on what we thought was an appropriate and right contact
policy. I know the Israeli government has a different view in this
regard." Ha'aretz also said that the US insists on maintaining
contacts with Fayyad. Israel Radio reported that on Tuesday EU
envoy Marc Otte met with Palestinian FM Ziad Abu Amr. Maariv
reported that on Tuesday France declared that it intends to resume
contacts with the Palestinian government, starting with non-Hamas
representatives. Ha'aretz and The Jerusalem Post quoted senior GOI
sources in Jerusalem as saying on Tuesday that Israel will boycott
foreign envoys who meet with Hamas ministers.

Israel Radio reported that the IDF knew in advance of settlers'
intention to occupy a Palestinian house in Hebron. Maariv quoted a
source involved in the alleged sale of the building to Jews as
saying that the Palestinian who asserts ownership of the property
sold it to a Palestinian who does not live in Israel and served as a
"straw man," and who is now afraid for his life. Therefore,
according to the source, the Palestinian is claiming that he never
sold the house to anyone. Israel Radio reported that Defense
Minister Amir Peretz is supposed to review the matter today.

Yediot reported that UN Secretary-General Ban Ki-moon will arrive on
Saturday night for a three-day visit of Israel and the PA. Ban will
meet with the families of MIAs and abducted IDF soldiers -- from the
Yom Kippur War period through the latest war in Lebanon.

Yediot reported that Transportation Minister Shaul Mofaz, leader of
Israel's team in the strategic dialogue with the US, who is visiting
India, told Indian FM Pranab Mukherjee that Iran will soon have
missiles able to deliver nuclear weapons. Hatzofe reported that on
Tuesday the Knesset approved a law drafted by opposition leader MK
Binyamin Netanyahu, which bans institutional bodies such as pension
funds from investing in companies trading with Iran. Israel Radio
reported that South Africa, Indonesia, and Qatar -- non-permanent
members of the UN Security Council -- want to soften the sanctions
expected to be imposed on Iran.

The Jerusalem Post published an analysis by Tel Aviv University's
Institute for National Security Studies (which incorporates the
Jaffee Center for Strategic Studies). The report says that the
Iranian-Saudi summit was a microcosm of Mideast contradictions.

Israel Radio reported that IDF troops killed a 22-year-old Fatah
militant in Nablus. He had reportedly hurled explosive devices at
IDF soldiers.

Ha'aretz reported that the Winograd Commission probing last summer's
war in Lebanon may release the testimonies of PM Ehud Olmert and
Defense Minister Peretz before the release of its interim report.
Yediot reported that the testimony of former IDF chief of staff Dan
Halutz will be made public on Thursday. All media reported that on
Tuesday the police interrogated Finance Minister Abraham Hirchson
over the alleged embezzlement of 5.6 million shekels (around USD
1.33 million) from Nili, a non-profit organization associated with
the National Labor Federation in Eretz-Israel i.e. the Land of
Israel] (Hebrew: Histadrut Haovdim Haleumit), to finance political
activity in the Likud Party, of which Hirchson was a member before
joining Kadima. Ha'aretz quoted Kadima Party insiders as saying
that Hirchson's days at the Treasury are numbered.

Yediot reported that several days ago Israel's Permanent
Representative to the UN Danny Gillerman met -- for the first time
publicly -- with Indonesian Ambassador to the UN Rezlan Ishar
Jenie.

Leading media reported that the Knesset is expected today to extend
and widen the controversial Citizenship Law, which denies family
unification to Israelis and Palestinians. The law, which was to
have expired next month, will be extended to July 2008 and apply to
citizens of the four "enemy states" -- Syria, Lebanon, Iraq and Iran
-- as well as to those of the PA. The law provides for the
establishment of a committee to consider exceptions on a
humanitarian basis. However, Ha'aretz wrote that, since the Shin
Bet, IDF and Population Registrar will have a majority in the
committee, not many exceptions are expected to be approved. The
Citizenship Law denies family unification to Palestinian men aged
18-35 and women 18-25.

The media reported that Tuesday's nationwide civil defense drill
featured a response to a mock chemical terrorist strike at a school
in Ramat Gan. During the drill, security forces attempted to thwart
an unexpected apparent terrorist threat that turned out to be
unfounded.

The Jerusalem Post reported that Michael Melchior (Labor Meimad),
the Chairman of the Knesset's Education Committee, intends to demand
from Olmert that he present the findings of a new report on
Palestinian textbooks to PA Chairman [President] Mahmoud Abbas at
their next meeting. The daily quoted Melchior at saying: "You
cannot have agreements while this kind of hatred is inculcated in
the children."

Yediot reported that the US Commercial Service at the US Embassy in
Tel Aviv, the United States-Israel Educational Foundation, and the
Israeli company Nirshamim have set up a joint Internet site ---
www.nirshamim.com -- to facilitate the registration of Israeli
students in US institutions of higher learning. The newspaper noted
that the web site does not prominently feature the most prestigious
American universities. Yediot wrote that the US is interested in
tripling the number of Israeli students in America.

The Jerusalem Post reported that, after suffering heavy losses to
Hizbullah anti-tank missiles during the second Lebanon war, the
IDF's Armored Corps has changed its mode of operations and now
intends to defeat the enemy using its two major advantages -- speed
and firepower.

Leading media reported that the legislative process to enact the
"Peres bill" according to which the next president of Israel would
be elected in an overt Knesset ballot -- thus allowing Vice PM
Shimon Peres to be chosen with a higher degree of certainty -- has
been frozen: The Knesset will elect the next president in a secret
vote. Maariv reported that a biography of Peres penned by Michael
Bar-Zohar, which is due to be published in New York shortly, says
that the late French PM Maurice Bourges-Maunoury signed a 1957
document committing France to aiding Israel's construction of a
nuclear reactor. Peres was director-general of Israel's Defense
Ministry at the time. The problem, according to the book, was that
Bourges-Maunoury signed the pact on October 1, 1957 -- one day after
the French PM's government had fallen. The book says Peres
persuaded the French official to date the document September 30th,
one day earlier. The book says Peres knew the new French government
would not be as friendly to Israel. The book says had word gotten
out the document had been backdated, "the agreement would have been
annulled."

Ha'aretz reported that oligarch Arkady Gaidamak has recently stepped
up efforts toward establishing a new party. The newspaper reported
that Gaidamak intends to woo the votes of Israeli Arabs and that he
counts on a well-respected retired senior political figure, who held
ministerial posts in previous governments, to join his party.

Maariv cited the American magazine People as saying that, during his
visit to Israel, Hollywood actor Leonardo DiCaprio acceded to Shimon
Peres's request to assist the peace process.

Yediot reported that the Foreign Ministry has recently received
complaints from the US, Spanish, British, and Chilean embassies
regarding the alleged humiliating treatment of tourists at
Ben-Gurion Airport.

Maariv reported that, during the night between Monday and Thursday,
a New York-bound Israir airliner ran out of fuel and had to refuel
in Canada.

Maariv cited a report by Symantec, a leading Israeli anti-virus
software producer, that Israelis are world leaders in spreading
computer viruses.

Israel Radio reported that, at 9 A.M. today, the Histadrut Labor
Federation began a nationwide strike in the public sector. The
industrial action will include almost all activity at Ben-Gurion
Airport.

------------
1. Mideast:
------------

Summary:
--------

Veteran journalist Yosef (Tommy) Lapid, Chairman of the Yad Vashem
Council, and former justice minister, wrote in the popular,
pluralist Maariv: "Invading Gaza is an illusion, the remnants of the
attitude of boastfulness and complacency, which apparently survived
despite what happened to the IDF in Lebanon."

Block Quotes:
-------------

"Finish Off Gaza in One Blow?"

Veteran journalist Yosef (Tommy) Lapid, Chairman of the Yad Vashem
Council, and former justice minister, wrote in the popular,
pluralist Maariv (3/21): "Growing pressure is being applied by the
political Right and by security officials for us to invade Gaza
'before it is too late'.... [Their] reasons should not be made light
of, since there is truth to them. But invading Gaza is an illusion,
the remnants of the attitude of boastfulness and complacency, which
apparently survived despite what happened to the IDF in Lebanon....
So what should be done by someone who still thinks that there is a
chance for an arrangement with the Palestinians? The government is
behaving correctly for now, when it refuses to recognize the Haniyeh
government, and makes an effort to prevent the erosion on the
international front against recognizing Hamas. As time passes, we
will see whether there is a chance that the current Hamas-Fatah
coalition will choose a moderate path, which will wear down Hamas's
rigidity, as happened to Fatah. In that case, there may be someone
to talk to and something to talk about -- if not tomorrow, then in a
year or two. At the same time, we will repeatedly warn the
Palestinians -- and world public opinion -- that if the Hamas
government launches a new Intifada, we will respond with
unprecedented force. Not with an invasion, that would only entangle
us, but with bombings, shelling, cutting off the power supply and a
total blockade -- until they take the hint. It is hard to know
whether this will do any good. What is certain is that invading
Gaza will do harm."

mass-circulation, pluralist Yediot Aharonot: "Israel's insertion in
the Union will make it necessary for Israel to adopt -- wherever is
needed -- values, standards, and legislation, thus transforming it
into more that just a partner."

Block Quotes:
-------------

"Birth Pangs"

Oded Eran, Israel's Ambassador to the European Union, wrote in the
mass-circulation, pluralist Yediot Aharonot (3/21): "In 1994 a
visionary German leader -- Helmut Kohl -- made the European Council
adopt in the German city of Essen a declaration according to which
Israel would be granted preferential treatment in its relations with
the European Union.... A breakthrough, i.e. a significant
implementation of the 'Essen Agreement,' will be possible when one
of the two (some say both) following scenarios will be realized: The
first one would occur if Turkey and the EU reach the conclusion that
Turkey cannot fully integrate the Union.... At that stage, neighbors
such as Israel and the Ukraine could demand a minor status, similar
to [Turkey's].... The second scenario would involve a diplomatic
agreement resolving the Israeli-Palestinian conflict. Some people
in Israel believe that the EU should offer Israel and Palestine
membership in order to reach an arrangement more swiftly. From my
knowing the inner workings of the Union, I fear that this idea would
actually delay the coming of the Messiah rather that bring it
closer.... Israel's insertion in the Union will make it necessary
for Israel to adopt -- wherever is needed -- values, standards, and
legislation, thus transforming it into more that just a partner.
This would be the realization of Kohl's wish to 'take Israel into
Europe' and the achievement of the Essen Declaration."

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